Monday, April 15, 2024

At rare Saturday meeting, city council takes heat for tourism tax hike

City Councilors heard an earful from city residents, business owners, and nonprofit officials who spoke against the proposed tax hikes to pay for a tourism development fund. (Steve Roberts, Jr./WYDaily)
City councilors heard an earful from city residents, business owners, and nonprofit officials who spoke against the proposed tax hikes to pay for a tourism development fund. (Steve Roberts, Jr./WYDaily)

Williamsburg city councilors received heavy criticism at a council work session about a historic tax increase Saturday morning, just one month after tabling the topic at a previous meeting.

Council chambers were nearly full of area business owners, residents, nonprofit representatives and former city officials who spoke against a tax hike which would be used to create a tourism development fund. Councilors looked at increasing taxes three different ways to pay for the fund and discussed several nuances about the fund.

The council did not vote on any measure at the meeting.

Ron Kirkland, a representative of the Williamsburg Hotel Motel Association, said many members of the organization were in favor of the tax increases and tourism development fund.

“We really like the 7-7-7 proposal,” Kirkland said, referencing the city’s plan to increase taxes on meals, lodging, and admission tickets to 7 percent. “If we need to do something different to make everybody happy that’s fine too. We need to create demand generators here.”

Former Williamsburg city employee Lewis Edwards said he was absolutely against any proposed tax increases.

“I believe the tax increases are a strategy for self-destruction,” Edwards said. “My wife and I frequent the restaurants of the city very often, and if you raise the taxes there, we’ll go somewhere else. Sounds kinda self-defeating to me.”

Former city councilor and hotelier Billy Scruggs said he wanted the City Council to hold town hall meetings on the proposed tax hikes. (Steve Roberts, Jr./WYDaily)
Former city councilor and hotelier Billy Scruggs said he wanted the City Council to hold town hall meetings on the proposed tax hikes. (Steve Roberts, Jr./WYDaily)

Williamsburg City Council made the unanimous decision June 8 to table the proposed resolutions regarding increasing taxes on dining out, admission tickets and hotel stays within the city.

If passed, the measure would levy up to a 7 percent tax on dining, lodging and admission to area attractions. For tourists and locals alike, taxes on dining out would be higher than in Richmond, Newport News, Poquoson, Norfolk, James City and York Counties, according to city documents.

The projected tax revenues could be as high as $4.5 million annually. The money would then be used to create a new tourism development fund, which the city says it will use to make a “generational investment” in Williamsburg.

City staff prepared a presentation for councilors on the composition of the tourism development fund’s review committee, projects that could be paid for with the fund and the different ways the city could raise taxes to pay for everything.

Part of the apparent lack of clarity as to the final use of the funds may be due in part to the three months it took for the tourism development fund to go from a concept to creation.

Tax talks dominated the city council work session held Saturday morning in Williamsburg.
Tax talks dominated the city council work session held Saturday morning in Williamsburg.
WYDaily file photo

In mid-April, the city stated the tax was just in an “ideas phase” regarding the tourism development fund, but two months later city councilors were prepared to vote on the measure. The June 8 vote was delayed after Mayor Paul Freiling urged council to take a hard look at the details of the policy.

“We really need to reinvigorate our tourism product in this community,” Freiling said at the June 8 meeting. “In my estimation, this is a risk we need to take.”

Freiling’s recommendation to delay came after nearly two hours of public criticism. One central theme from the speakers was concern about the hastiness with which the resolutions were drafted.

The City Council chambers were nearly full of critics from all parts of the political spectrum on the proposed tourism development fund at the June 8 meeting. Many business owners, the Greater Williamsburg Chamber and Tourism Alliance, Americans for Prosperity, Colonial Williamsburg officials, and even State Sen. Tommy Norment spoke against the measure.

“One of the reasons I can’t support this today [June 8] is because I don’t know what we’re voting for,” said Councilman Benny Zhang. “As of right now with fractured community input and no consensus on this project, I need to know what we’re getting into here.”

City resident Will Murray said he wanted councilors to propose one project they would want to be funded by the fund.

A nearly full room of business owners, residents, and nonprofit officials spoke against the tax hikes. Nearly all speakers spoke against the measure as it stands. (Steve Roberts, Jr./WYDaily)
A nearly full room of business owners, residents, and nonprofit officials spoke against the tax hikes. Nearly all speakers spoke against the measure as it stands. (Steve Roberts, Jr./WYDaily)

“I was surprised that after many people in the audience some of the city council personnel had prepared speeches,” Will Murray said. “The June meeting appeared as if the council was trying to push something.”

One of the city’s leading organizations could become the biggest loser as the city looks to create a 7 percent tax on admissions tickets to Colonial Williamsburg and two other ‘places of amusement or entertainment.’

The tax couldn’t come at a worse time for Colonial Williamsburg as it has been undergoing significant corporate restructuring. The organization has claimed the new tax would jeopardize their financial future.

The Greater Williamsburg Chamber and Tourism Alliance ‘conceptually’ agrees with the idea of a tourism development fund in Williamsburg, but the group’s president Karen Riordan says the proposed revenue streams from meals, lodging, and admission tickets might not be enough.

“We do not support the proposed funding option of 7 percent meals tax, 7 percent room tax and 7 percent admissions tax, recognizing that there are a range of opinions to be heard and examined within the business community,” Riordan said.

The Greater Williamsburg Chamber and Tourism Alliance is the destination marketing organization for Greater Williamsburg and advocates for 825 businesses and nonprofit groups in the area.

Assistant General Manager at the Movie Tavern, Ken Davis, said the theater had collected over 500 signatures against the admissions tax and over 90 percent of those signatures were Williamsburg residents.

“I may not be a Colonial Williamsburg, I may be just a small little movie theater, but 90 percent of those [signatures] are Williamsburg residents,” Davis said.

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